So your stock portfolio just dropped, now what?

by Davelle Morrison

 

Davelle Morrison has joined a select group of entrepreneurs from around the world, along with Brian Tracy, to co-author the forthcoming book titled, Success Today: Common Sense but Uncommon Knowledge from ​Today's ​Leading ​Entrepreneurs and ​Professionals to ​Help ​You ​Lead an ​Extraordinary ​Life of ​Health, ​Wealth and ​Success. Nick Nanton, Esq. along with business partner, JW Dicks, Esq., the leading agents to Celebrity Experts® worldwide. The book was released on August 6, 2015.
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The recent declines in the stock markets around the world have sent many people looking at their investment portfolios with grave concern. It’s dis-heartening that investors across the world in a different country can send our own North American markets into a tail spin. Fortunately this time around many investors saw the light at the end of the tunnel and instead of selling their investments and solidifying their losses, they chose to double-down and buy some deals in the marketplace. It never makes sense to sell your stocks when the market is down because then you’ll never have the opportunity to make your money back when the market comes back up again. 

But wait, what if you were retired and the market stayed down for a few months and you actually needed to live off that money? Now, that decrease in your investment portfolio will affect your daily living and budgeting. But what if, you saw the writing on the wall and took some additional precautions before you retired to add one or a few investment properties to your overall portfolio so that if the stock market went down and you needed cash, you’d still have a steady stream of rental income coming in? That’s what I decided to do in 2008 when we had the last big crash, I started to think what if I had just turned 65 and the market crashed, then what. I started to build my own real estate portfolio to mitigate against any possible losses to my RRSP when I retired. 

I’m happy that I have my RRSP but I am also happy that I own a few investment properties. It’s like I’m hedging my bets in retirement. And I feel a house is something more in my control. I wrote about investing in real estate as a back-up plan for your retirement in the Amazon Best-Seller, Success Today with Brian Tracy. I have joined a select group of entrepreneurs from around the world to co-author, Success Today: Common Sense but Uncommon Knowledge from ​Today’s ​Leading ​Entrepreneurs and ​Professionals to ​Help ​You ​Lead an ​Extraordinary ​Life of ​Health, ​Wealth and ​Success. You can purchase the book on Amazon at http://tinyurl.com/davellesbook. Please let me know what you think and if I can help you plan your own real estate retirement portfolio.

Lack of liquidity in real estate is a good thing

by Davelle Morrison

stock market downI love my debates with the financial types about the merits of investing in real estate.  They only seem to have eyes for the stock market.  The debate inevitably turns to, real estate is illiquid and is therefore bad.  With the stock market one can sell whenever they want to, proving it’s liquidity.  However there is a flaw with this logic.  In 2008, when the market crashed, many people sold many of the stocks within their portfolios.  This only served to realize their losses.  Prior to selling their stock, the loss was strictly on paper.  Once they sold, that loss was very real with no chance to recoup those losses.  Now what if those same people kept their money in the market and didn’t sell?  Six years later and the stock market is doing very well and most of those stocks have increased markedly.  Had they not sold, they could take advantage of those profits now.  The fact that the stock market is liquid made it too easy for people to sell and realize their losses.  Liquidity hurts the stock market investors. 

If we look at real estate during the recessionary period in the early 1990’s when the real estate market was down.  Some sold their homes and accepted the loss.  Others held onto their homes & didn’t take the loss which was only on paper.  Many years later, all of those home values have increased substantially proving that illiquidity is a good thing.  If the stock market was more illiquid, it would help those who always sell too quickly, realize more profits instead of loss.  So next time you hear someone tell you that the illiquidity of the real estate market is a bad thing, please tell them to think again.